IBM's Linux Show

FIRST THING YOU SAW walking into the LinuxWorld show last Wednesday was a giant IBM booth. It stole center stage from the longhairs who invented the counter-commercial Linux software. They sat at card tables in a back aisle, shooting aliens on their homemade computers.

IBM has made Linux a commercial factor. Linux specialists like
Red Hat Software
were there, sure, but Red Hat's still losing money on operations, with revenues running at an annual rate of just $100 million a year. And while the inventors of Linux may have thought they were creating an alternative to the software monopoly of Microsoft Windows, IBM has used Linux as a brilliant attack on Sun Microsystems. Sun's most successful business is the sale of proprietary computers running Unix software, an operating system similar to Linux.

Giving away Linux on cheap Intel-based hardware, IBM can undercut the price of Sun's computers and still make money on proprietary IBM software and consulting services. At LinuxWorld, IBM announced new Linux computers and a Linux version of its Tivoli software for automating data centers.

While IBM profited nicely on December quarter sales of $24 billion (nearly half of that from consulting), Sun still suffered a slight operating loss on $2.9 billion in sales for the same period. Santa Clara, Calif.-based Sun has remained cash-flow positive for years, and those December quarter revenues were 6% above September's. But with its shares at 3.45 -- the company's $11 billion stock-market valuation is less than annual revenues -- Sun clearly needs to convince the world that it can compete with Linux.

Linux is not competition for Sun, insists the company's head system-software engineer John Loiacono, because Sun itself ships Linux products. In a Javits Center conference room, Loiacono diagrammed Sun's entire software product line, on the back of a press release. Every piece of software sold by Sun will run on Linux and Intel-based hardware, vows Loiacono.

Smoothly integrated with Sun's own stack of software will be third-party Linux applications like the MySQL database. At LinuxWorld, Sun said that seven of its crown-jewel software products are shipping in Linux, with the remaining ones ready this year.

By offering Linux boxes with Intel microprocessors, Sun is not abandoning its proprietary hardware, known as Sparc. Linux-on-Intel boxes have been cheaper than Sparc, says the Sun executive, but Sun plans to slash Sparc costs to make them competitive.

When selling against IBM, Loiacono says that Sun will tout the well-oiled integration of Sun's Linux solutions, which should save its customers the expense of hiring IBM consultants. "We're a product-based company," says Loiacono. "Our integration is up front."

Compared to Microsoft Windows, says Loiacono, the Sun solutions will be more open. Customers could swap out a Sun component in favor of a third-party alternative -- say, a network directory database from NetWare.

At least in court, chortles the software engineer, Microsoft says that removing one of Windows' tightly welded pieces, like the Internet Explorer browser, will crash the system.

A Linux Award for Microsoft

The Microsoft booth at LinuxWorld was its first at the annual Javits Center expo. Set discreetly toward the rear of the floor, the display showed how a Windows computer could play nicely on a network with computers running Linux-style software.

Nobody threw a cream pie at Peter Houston, the Microsoft manager who sets strategy for the company's server software products. In fact, a Microsoft product that services non-Microsoft computers won a Best of Show prize in the category for system integration software. Given the past animosity between Windows and Linux, it's understandable that Peter Houston worried that the prize was a prank.

It wasn't. Linux seems to be hurting Sun Micro more than Microsoft, says Houston, because Linux systems have been noticeably cheaper than Sun Sparc systems but not terribly cheaper than Windows systems.

Another Linux innovation, the opening of its computer source code to the eyes of the world, hasn't hurt Microsoft either, Houston says. Microsoft has adapted, by allowing an important user like a national government to examine Windows' secret source code to satisfy security worries.

Light Switch

Believe it or not. A startup company has survived the crash in fiberoptic telecommunications that's crushed giants like
Nortel Networks.
With $210 million in venture backing, Chiaro Networks, of Richardson, Tex., has built a network router that can switch beams of light without converting them into electrical pulses. While remaining compatible with the electrical switches of
Cisco Systems,
Chiaro's optical router can handle increasing levels of traffic without slowing down. It's solid-state, so it doesn't move little mechanical mirrors like other optical switches touted by "nanotechnology" gurus.

"Who are these cowboys from Texas, trying to build a router?" asks Chiaro chief executive Ken Lewis, laughing. They're a bunch of telecom veterans, who hope to first sell the switch to the few dozen telecom nodes where traffic continues to rise. Chiaro's optical technology could handle all traffic growth expected over the next seven years -- which is lucky, since phone firms won't be buying much of anything in the current year.

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